Many people confuse rooting with installing custom rom’s and vice versa. Rooting as explained in this post is the process of gaining administrator access to the phone. That’s it!. Its up to the user to then decide what he needs to do with the new power. Custom rom’s are a different ball game altogether. Custom rom’s are a operation system’s based on open source Android code available from Google and which have been custom configured for your phone model. There are very high chances that custom rom user interface will be completely different than the one that came pre-installed with the phone. Many of the custom roms require the phone to be rooted as a pre-requisite.
Cyanogenmod is one group of developers who develop custom rom’s for many popular models. There are many other groups each having their own specialty much like there are different version of Linux around.
Custom rom’s are therefore only recommended for those who know what they are doing as there is a chance that your phone may get converted to a paper weight if something goes wrong.